Monday, January 13, 2014

Intelligence for What? Framing the Smart City Challenge

.... the path to triple sustainability ....

Since the approval by the European Commission of a long term strategic investment plan aimed at turning European cities into smarter ecosystems, many commentators from both industry and academia have embarked into proposing how to make our cities more intelligent.

As suggested by Alberto Cottica, two main visions have emerged overtime from the international debate. The first, mainly advocated by big corporations like IBM and CISCO, in which technology and interdependence play a key role and intelligence, mainly residing in ICT labs and universities, is infused in technological artifacts (e.g. the Copenhagen wheel). The second, stemming from the hacker culture and the world of social innovation, in which the main idea is to redesign cities to make them more comfortable, simple and sustainable either through high or low technological solutions. In this vision intelligence is highly decentralized and resides in the heads and hearts of citizens.

Whether a dominant approach towards the promotion of smartness will emerge across Europe is yet to be seen. Nevertheless, a key fundamental question still remains to be addressed: how may the intelligence of cities be turned into triple sustainability (economic, social, environmental)? And how may the challenge faced by cities be formalized simply and clearly enough to be fully understood and tackled successfully?

In the remainder of this post, I will try to address the above questions by introducing the "Smart and Inclusive Sustainability Framework" (or SIS Framework) that builds upon two posts I published on this blog. The first, on The Role of ICT in the Governance of Smart Cities in which it is argued that "the real smart city will have to learn how to reconcile individual and collective needs, in other words: channel individual aspirations towards the creation of value for society at large through the attainment of economic, social and environmental objectives". The second, titled The Tao of Academic Research which suggests that the search for a dynamic equilibrium between opposite yet complementary elements represents a key principle underlying the attainment of any objective.

- The Smart and Inclusive Sustainability Framework -

The SIS framework unfolds along two main dimensions. A vertical one, dealing with the allocation of resources and representing the tension between heterogeneity (of abilities) and homogeneity (of basic needs). At the upper end, it is possible to find the strive towards excellence entailing rewarding merit and performance through the concentration of resources on a limited set of worthy individuals. In so doing, an incentive is provided to put one's energies into value creation activities that may generate positive externalities for the individual as well as for society at large. At the lower end, it is possible to find a uniform and indiscriminate distribution of resources for guaranteeing the recognition of a number of basic universal rights (education, employment, housing, health, etc..). If a community positions itself at one of the two extremes of this dimension, it may either generate a situation in which the concentration of resources leads to unsustainable levels of social injustice or - at other end of the spectrum - a situation in which the process of resources allocation does not provide any incentive to more capable individuals to realize their excellence potential, thus resulting in a generalized loss of competitiveness for the entire socioeconomic system.

The second dimension of the SIS framework deals with the consumption of resources. Along this dimension a balance has to be sought in the usage of resources for individual and collective needs as well as between current needs and future needs (including those of future generations). At the extreme left, it is possible to find a situation of uncoordinated consumption characterized by individual voracity or collective shortermism while at the other extreme, it is possible to find a more conservative behavior leading to an under-exploitation of the potential available at any given point in time.

Finally, within the space of options identified, it is possible to draw a diagonal line representing a boundary between self-interested and more altruistic behaviors.

If we use the model as a lens to look back at the socioeconomic history of the last decades, it is possible to realize that until the late 80s the western world was marked by a dichotomic alternative interpretation of how societies could be organized. On the one hand, there were western societies highly relying on market principles (remuneration of individual performance, promotion of consumption, etc.) and, on the other hand, eastern societies characterized by government-led economies promoting higher levels of social homogeneity (planned production/consumption, uniform distribution of financial resources, etc.). The fall of the Berlin wall was interpreted by many as proof of the unsustainability of the government-led model and as sign of the validity of the market centric model. Twenty years down the road, the severe financial and economic crisis that hit the world showed that an approach purely based on a market logic may generate dangerous levels of social injustice and environmental unsustainability, and that a balance between the two visions should be sought.

Moving back to cities, at this point a legitimate question could arise: how could balance be obtained in practice? The answer is not straightforward and may depend on the fields considered, nevertheless a few suggestions may be put forward to translate a theoretical framework into useful advice.

To foster excellence, selection is a key principle to apply. The process of selection should be as open and transparent as possible and highly relying on distributed intelligence and peer review mechanisms. At the same time, conditionality should be used as a counter weight to promote social and environmental sustainability. To exemplify: scholarships promoting excellence among students could be designed to require gifted students with financial needs to help one or more colleague with learning difficulties. Another example would be to grant higher levels of public co-funding to R&D endeavours leading to labour-intensive innovations in virtue of their contribution to the attainment of a plurality of results, a generation of a competitive advantage or a more sustainable product/process and, at the same time, a reduction of the unemployment rate. From a private consumer perspective, citizens could exert their power by applying selection and conditionality principles in their purchasing choices. As a matter of fact, peer-reviewed assessments activities conducted by Internet communities about products sustainability may be employed to inform citizens purchases and influence the way companies manage their processes (packaging, supply chain, recycling, salaries etc.) and promoting the development of a circular and fair economy.

Another activity that may help smart cities in finding a virtuous balance between the consumption and the preservation of resources has to do with the promotion of access versus property. Favouring a shared consumption of any kind of asset leads to a multiplication and redistribution of value without necessarily impacting on the amount of resources consumed. Car and bike sharing/pooling services are a good exemplification of this concept that should be extended to many more aspects of city life. The promotion of collaborative consumption represents a good balancing mechanism as it leads to higher levels of assets utilization, lower usage of resources and higher amounts of value generation. In this respect, it is important to mention the need to work towards the construction of higher levels of trust representing an essential ingredient for the establishment of better and more effective relationships and a precondition for any sort of collaborative behaviour.

Concluding, the value offered by the SIS Framework is to provide a simple and clear representation of the tensions which cities will need to manage in a smarter way to increase their level of sustainability. In other words, the intelligence of communities will primarily need to be applied to finding effective methods for a balanced allocation and consumption of resources.